Retail stores - small shops

[bright21]

Who here has their own retail store, such as in a busy high-street, and if we were to look at setting one up in the near future, how much should we expect to spend? - Obviously there's the cost of 'rent' as such for that space, but are there any other costs that we would need to factor in, such as any kind of additional taxes (other than standard business hmrc/vat etc), or is it literally just the rent cost?

It would be for a 'small' location to start with, if anyone could give an indication of how much to expect to pay for something like this then that would be a great help, (I know every area of the country will vary, but just as a kind of rough figure to give some kind of indication of what we're in for.. any help/advice/info much appreciated,

Regards,

bright21

 

[kelvin1950]

Business rates, but ask the local council about small business rates relief.

Building insurance, either directly or the landlord will arrange and invoice you.

 

[PrestonLad]

For a start, rather than ask for cost of rent, rates etc, it is far easier to google to find a local commercial estate agent website, and find the particulars for some shops similar to those you want to rent. This will give you a lot more information than you might have imagined... for example, an idea of rent for the type of shop you want, in your chosen town... but also there should be quoted the rates payable (sometimes alternatively quoted as rateable value - say value 8000..... and a current payable rate of, say 50p in the pound, meaning you pay 4000 per year). Rent and rates can vary massively - even over a distance of 200m - depending on where the retail hot spots are.

You need to pay professional fees at the outset, for drawing up contracts (and ongoing accountancy fees etc)
You'll probably have a lease where you are liable for upkeep and building insurance. In which case you should almost certainly get a survey done at the outset to agree on current condition. It is common for people to take on a shop.... spend money on it... but at the end of lease, find that the landlord insists on certain repairs doing to the roof or something - and you might be liable -so having a good survey at the outset... and keeping up a dialogue with the landlord throughout, can help avoid a lot of problems later.
Depending on whether your shop is in a shopping centre, you might need to pay a share of security / energy costs etc.
You will need a music licence if you want to play the radio/ music ... I think this is about 200 quid but depends on shop size.
You'll need insurance... including public liability.... perhaps to cover stock, or your illness etc... and as already mentioned, the building.
Probably a few other things I've forgotten! Hope that's a good start.

ps... this is adapted from a post I've done somewhere else... You can use the search function to find threads like the one you've started. Good luck

 

[kelvin1950]

Building on Preston Lad's post, try to get an internal only lease as opposed to a full repairing one. Landlords will nearly always ask for the latter and you should be bucking for the former.

 

[Chris Ashdown]

Dont forget insurance public liability, employees, glass window, building,

 

[jberlin]

Preston,

Your biggest overheads are most likely to be Rents and Rates. There are a number of tricks, particualy with rates you can use to reduce your expense.

I would suggest you select the location you would like to move into. Select also your budget in terms of rent. If you instruct a professional surveyor and advise them of these details they should be able to find you a property that best meets your requirements. A letting agent may just try and talk you into taking on any property they have on their books just to get rid of it. They may not be able to advise you on matters such as business rates. Also, by instucting a surveyor they should be able to get you the best possible lease terms including rent free periods and break clauses should things not work out.

The above is easy for me to say as i am a commercial property surveyor but in the long run it will save you money.

James
James Berlin & Associates

 

[PrestonLad]

Preston,

Your biggest overheads are most likely to be Rents and Rates. There are a number of tricks, particualy with rates you can use to reduce your expense.

I would suggest you select the location you would like to move into. Select also your budget in terms of rent. If you instruct a professional surveyor and advise them of these details they should be able to find you a property that best meets your requirements. A letting agent may just try and talk you into taking on any property they have on their books just to get rid of it. They may not be able to advise you on matters such as business rates. Also, by instucting a surveyor they should be able to get you the best possible lease terms including rent free periods and break clauses should things not work out.

The above is easy for me to say as i am a commercial property surveyor but in the long run it will save you money.

James
James Berlin & Associates

Thanks James,
Of course, the service comes at a price! But it is something I've been mulling over for my shop. I do see possible value.

 

[jberlin]

no problem,

One further tip to save you some surveyors fees. Obviously some are better than others and may therefore be more expensive. That being said if you can get a cheaper quote from another company and take it to them they will most likely match!

 

[BristolBiz]

Why are you looking for a small unit, may I ask - is this all you need, or are you planning a cautious start, with expansion coming later?

 

[bright21]

Thanks to everyone who's posted so far for your informative posts, will definitely consider everyones comments. As with anything, there's a lot of planning and prior work that needs to be done before jumping into anything, so its very useful hearing what everyone here has to say.

Why are you looking for a small unit, may I ask - is this all you need, or are you planning a cautious start, with expansion coming later?

Of course expansion would be great in the future, but wouldn't want to jump into the deep end, or out of my depth should I say, so thought by going for a smaller unit, it would be ideal to test the water, and see how things go from there.

Thanks again to everybody who has posted.

 

[BristolBiz]

Can you make enough money in a small unit? It can be difficult (& expensive) to relocate.

 

[StratBee]

Can you make enough money in a small unit? It can be difficult (& expensive) to relocate.

Not necessarily... There are low risk, affordable ways to test a retail store / shop format as, a small unit.
For some businesses & business owners testing elements such as; the performance, management requirements and day to day encounters that come along with operating a retail unit, can provide a highly useful, insight before, they commit to long term decisions like longer lease aggreements.

 

[Talay]

Why are you looking for a small unit, may I ask - is this all you need, or are you planning a cautious start, with expansion coming later?

The cost for 100m2 is not 10 times the cost for 10m2. Also, the cost of prime location needs to be evaluated not in isolation but in comparison to the cost of near prime and then secondary locations. Where I am for instance, the decision to go sub prime is not clear cut.

 

[Crystal Maze]

Even If you do qualify for rates relief, no matter what, you still have to pay for water rates L

 

[alsze]

I know different areas have different rules.

I want to share the some information here in Shenzhen, China.

My elder sister opened a retail in Huaqiang metro shopping mall. where just near the exit of subway station, the retail shop located in a corner. while there still cloud of people wander here because there is the shopping mall. for the rent cost is about 2000 RMB/month, and the power charges, the water charges ,the manage charges,etc. total about 2500 RMB/month.

If start a new retail, We have calculated the total cost, including the decorations, the pre-rents fees, the goods cost.. totally about 50,000 RMB/month...

So the start money is a bit higher, I think, then the cost will much less...

 

[Stuart Bailey]

1. rent
2. rent deposit if you are a company
3. landlord's building insurance
4. if you are in a shopping centre, service charge which will include repair, lighting, security of the centre (and buildings insurance)
5. business rates (although you may get small business rate relief)
6. some cities have Business Improvement Districts which you have to pay for (again a small business relief may apply)
7. public liability
8. utilities
9. shop signs
10. the list goes on....

 

[Brightpearl]

I'd look to get some point of sale and inventory software to help you manage your stock, orders, accounts etc. this could save you valuable time in admin and help you keep on top of your stock control/stock-takes as well as provide helpful insights into your best performing products etc.

There are lots of solutions out there to help you do this with both EPOS and inventory management capabilities too, plus if you get one that covers multiple channels you can always expand into the online world at a later stage, even if to offload unwanted stock onto eBay etc.

Perhaps check out Brightpearl at some point? Obviously you've got bigger things to think about initially but probably worth thinking about to help you at some point?

Good luck!
Harriet

 

[Kolypit]

For a starter, I think you should calculate the promotion budget.....